The elimination of the fuel subsidy has been deemed “timely” by the National Institute for Policy and Strategic Studies (NIPPS), which is requesting that Nigerians bear the immediate pain caused by the new policy.
The withdrawal of the fuel subsidy during President Bola Tinubu’s inauguration caught Nigerians off guard and caused the price of the necessary good to surge right away.
Millions of Nigerians reacted angrily to that one action, accusing the Federal Government of being insensitive and failing to implement safeguards against the harsh consequences of the termination of energy subsidies.
But the Director General of the NIPPS, Ayo Omotayo, says the removal of subsidy was necessary and will favour the country in the long run.
“Well, most of the benefits will be in the medium and long term. In the short term, the government has tried to put out palliatives so that those who are suffering – the poor man on the street – from the effect of fuel subsidy would be able to make some adjustments. We all need to make some adjustments to our spending,” Omotayo said on Tuesday’s edition of Channels Television’s The Morning Brief.
“The gains at this time are very little, but then in the long run, we will make up for whatever sacrifices we have made today as Nigerians,” he argued.
Tinubu’s move ended a long-running arrangement to support fuel prices in Africa’s most populous country and biggest economy.
The country is oil-rich but has a meagre refining capacity. For years, it has swapped crude for gasoline that it then subsidises for its domestic market, causing a huge drain on revenue, foreign exchange and contributing to ballooning debt. Tinubu had vowed on the campaign trail to remove the costly help, and during his inauguration, he declared that the “fuel subsidy is gone”.
The uncertainty and sudden change caused panic among many in the country, leading to a spike in the cost of the product.
‘Timely Step’
But the NIPPS boss has defended the removal of fuel subsidy and said it was a “very timely step”.
“So for us at the National Institute, it was a very timely step that Mr President took, and it has come a long way in saving Nigeria,” he said.
“We were on the verge of collapse with subsidies. The subsidies we were paying were just totally unimaginable, and of course, we were subsidizing fuel as far as Burkina Faso, as far as Sierra Leone in some instances. So a government that wants to succeed must take very tough decisions. For us at the National Institute, we commend the President for the removal of fuel subsidy, even though the Nigerian politic may feel it is harsh, that we needed some more time.”
While the end to the subsidy regime led to an increase in the cost of living, Tinubu proposed a temporary minimum wage hike for lower-paid workers, cheap gas-powered public transport, and more social security for the poor to help offset the impact of his economic reforms.
“Reform may be painful, but it is what greatness and the future require,” the president insisted.
“There is no joy in seeing the people of this nation shoulder burdens that should have been shed years ago. I wish today’s difficulties did not exist. But we must endure if we are to reach the good side of our future.”
